Summary
A proposal to increase the supply and borrow cap for USDT and supply cap for wstETH on Aave V3 Ethereum.
Motivation
The supply cap for wstETH on Ethereum is currently at ~85% utilization, with the supply and borrow cap of USDT at 80% and 67%, respectively.
Following our supply and borrow cap methodology, and our LSD methodology, we recommend the following updates:
- Increase the supply cap for wstETH from 450K to 600K.
- Increase the supply cap for USDT from 200M to 300M, and the borrow cap from 185M to 250M. We want to highlight that upon execution of AIP-271, USDT will become a collateral asset on V3 Ethereum.
Specification
| Chain | Asset | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
|---|---|---|---|---|---|
| Ethereum | wstETH | 450,000 | 600,000 | 12,000 | No Change |
| Ethereum | USDT | 200,000,000 | 300,000,000 | 185,000,000 | 250,000,000 |
Next Steps
Once we receive feedback from @Gauntlet on the above recommendations, we will be able to move forward to implement these updates via the Risk Steward process.
Disclaimer
Chaos Labs has not been compensated by any third party for publishing this ARFC.
Copyright
Copyright and related rights waived via CC0